In a new report published on companies that are best positioned to sustain a long-term competitive edge, Goldman Sachs has identified BBVA, HSBC, Morgan Stanley, National Australia Bank, Standard Chartered, Banco Bradesco and HDFC from the banking industry.
"We identify two BRICs-listed companies, Banco Bradesco and HDFC, as leaders on financial returns and industry positioning with upward momentum in their ESG scores. These are included in our GS Sustain focus list as best of the BRICs leaders," the Goldman Sachs report stated.
While including these seven companies to its GS Sustain focus list, Goldman Sachs said these are best positioned to sustain competitive advantage over the long term through a combination of metrics such as return on capital, industry positioning and environmental social and governance (ESG) performance.
While HDFC has been named among the best seven companies from the banking industry, two other Indian banks ICICI Bank and State Bank of India have also figured in the broader list of companies in this segment.
More From This Section
"The ability of emerging market banks to improve ESG performance shows a strong relationship with improvement in returns. This suggests that banks focused on enhancing their management quality are better positioned to deliver sustainable high returns," the report stated.